Liberals launch spending spree
Budget doles out billions in bid to share ‘benefits of prosperity’
Ontario’s Liberal finance minister took the unusual step Wednesday of quoting former U.S. vice-president Joe Biden in his economic blueprint. Show me your budget, Biden apparently said, “and I’ll tell you what you value.”
By that standard, Liberal values have taken a dramatic turn in the last year, from a brief dedication to fiscal conservatism to favouring a spending spree that would guarantee deficits at least until the middle of the next decade. Minister Charles Sousa sent the government leaping into the unofficial campaign for Ontario’s June 7 election with a budget that promises billions more for everything from prescription drugs to apprenticeship programs and welfare recipients.
After a year of balanced finances — even the small surplus for 201718 — the government would run deficits of up to $6.7 billion until the middle of the next decade, he said. In the process, the plan would further increase a provincial debt considered the largest in the world among regional governments, and position the Liberals firmly on the left of the province’s political spectrum.
The Progressive Conservatives party and its new leader, Doug Ford, are well ahead in the polls with their vow to bring financial restraint to the government, but on Wednesday Sousa insisted it’s time for a different approach. “While this province has experienced economic growth, the benefits of this prosperity have not been shared by all,” the minister said in his speech. “We must work to ensure that opportunity reaches everyone.”
Many of the new spending programs devised to address those needs had already been announced over the past several days.
But the budget offered up more initiatives, promising drug and dental coverage for the uninsured, help for the developmentally disabled and higher welfare rates. There were also modest tax increases, including a change in the personal income tax that means 1.8 million people would pay about $200 more a year.
As well, the budget would usher in a historic new source of revenue: the provincial share of a federal cannabis excise duty expected to reach $115 million by 2020-21. With so many goodies on offer, Windsor Mayor Drew Dilkens said one line item that could have had a major effect on the city’s downtown was noticeably missing. The University of Windsor’s plan to move its law school into the Paul Martin Building fell apart last year after the province didn’t come to the table with funding for the project.
“Within all of those billions of dollars of spending announcements, the government could not seem to find $20 million to help us finish the Paul Martin project,” he said.
“They ’re the only level of government that wasn’t coming to the table after six years of working on it.” Aside from that, Dilkens said there were so many other promises in the budget that it’s “almost unbelievable.”
He questioned how it would all get done.
“The budget that was announced is extremely ambitious, and creates a huge deficit for Ontario moving forward,” said Dilkens. “It’s hard to see how the government would be able to deliver on all the promises that they’re making, because it’s unlike any other budget I’ve seen before. “Clearly, this is a budget that’s designed to be an election-based budget. We know there is an election in June and this certainly is an effort ahead of that to appeal to the most number of people.”
But the budget is, of course, aspirational, its implementation dependent on the Liberals winning the election two months away. On Wednesday, Ford dismissed it as a desperate attempt at achieving that goal, and more of what has already hurt Ontario.
“The Liberals think they can buy your vote,” he told reporters. “All they do is tax, tax, tax and spend, spend, spend. People are fed up. They’ve had it, they’ve absolutely had it.”
The budget and its lavish spending puts the NDP in a different position — fighting off an assault on its left flank.
But Andrea Horwath, the New Democratic leader, said the measures announced Wednesday are just a cynical ploy for popularity, and not nearly enough. “This is not something I would consider an out-lefting budget,” she said.
“I do not support any of the programs in this budget. I think it’s a very, very meagre attempt to get votes.”
After a string of deficits and growing discontent over how the
Liberals were managing the province, Sousa brought in a balanced budget last year and promised to do the same for three more years. He claims that Ontario has had the highest growth rate in the G7 and the province’s lowest unemployment numbers in two decades. The government will post a $640-million surplus in the fiscal year ending this month, the minister said.
But that would come to a crashing end in 2018-19. Already announced at recent news conferences was more money for hospitals to fund extra surgeries and other services, free daycare for children between the ages of two and a half to four years old, a better drug plan for senior citizens and $2 billion for mental-health care. Sousa’s budget on Wednesday unveiled more help for the sick, disadvantaged and older people. There’s a new benefit of up to $750 to help seniors look after themselves at home, costing $1 billion, an extra $650 million for homecare services, $100 million for care of dementia patients and $300 million to put a registered nurse in every nursing home — all spread out over three years. The province would also set up a new plan, at $800 million across two years, to provide drug and dental coverage to people without workplace health insurance.
It would be capped at $400 a year for singles, $600 for couples and $50 for each child.
The budget pledges $1.8 billion over three years to expand services for the developmentally disabled, and $2.3 billion through the same period for social assistance, including three-per-cent raises in each of the next three years. And it would set up a $935-billion “Good Jobs and Growth Plan,” a broad heading that encompasses new training programs in colleges and universities, more apprenticeships and various infrastructure projects.
Much of that is paid for by running up deficits, about $6.7 billion for the next three years and tapering to a projected balanced budget by 2024-25.
But there are some tax hits, too. As well as the personal incometax change, an exemption from the employer health tax would be limited to fewer businesses, meaning 20,000 would pay about $2,400 a year more, expected to eventually bring in $45 million.